Chapter 4 - IMC planning process

Question 1

Describe the customer groups on which consumer research should focus

Answer 1

=> Current customers
=> Former customers
=> Competitor customers
=> New customers

Question 2

Provide some examples of research techniques fo customer groups

Answer 2

=> Experiments
=> (Micro) Surveys
=> Twitter analysis

Question 3

Provide potential insights that can be generated by the research techniques of costumers groups

Answer 3

=> Consumer needs (ex: significant change)
=> Most influential characteristics when choosing a brand
=> Most influential stakeholders when choosing a brand

Question 4

Describe the steps utilized in competitor research

Answer 4

1. to find out who are the main competitors
2. the sales figures of competitor
3. How competitor tries to be perceived ?
4. What kind of communication competitor use and what are the goals?

Question 5

Describe the information sources utilized in competitor research

Answer 5

Primary research

=> Visiting competitor stores (study merchandise displays)
=> Talk to vendors to find out relationship

Secondary data

=> Advertisements
=> Promotional materials
=> Annual reports
=> Websites

Research about what others say

=> Trade journals
=> News

Question 6

provide some examples of potential insights that can be generated by competitor research

Answer 6

=> Identify major/closest competitors

=> Identify strategies and tactics of competitors

Question 7

Segmentation principles

Answer 7

You need segmentation variables to classify consumers and aim to create homogeneous segments

Question 8

describe the observable characteristics that can be used to identify segments

Answer 8

easier to observe :

=> gender 
=> age
=> ethnic group
=> income
=> Education

harder to observe :

=> activities
=> interests
=> Opinions

Question 9

Describe the segment viability test that can be used when deciding which segments to target

Answer 9

=> satisfy needs better than competitors

=> needs should be homogenous

=> needs should be distinct from other segments

=> segments should be meaningful

=> consumers should be reachable for marketing campaign

Question 10

Define positioning

Answer 10

an attempt to create and maintain a unique representation of the brand in customers’ minds relative to competition.

Question 11

7 positioning approaches

Answer 11

=> product attribute

=> competitors

=> application

=> price/quality

=> consumers

=> product class

=> cultural symbol

Question 12

product attribute positioning approach

Answer 12

=> Often very clear and concise positioning
=> Often when attribute is novel & noteworthy

ex: adapting lights for Audi

Question 13

competitors positioning approach

Answer 13

=> Very direct, but could also highlight weaknesses
=> Only if really superior compared to other brand

ex : Audi vs BMW

Question 14

application positioning approach

Answer 14

=> Introduce innovations (reduce uncertainty, show benefits)
=> But also for experiential products

ex : Joy to ride a cabriolet

Question 15

price/quality positioning approach

Answer 15

=> For brands positioned at extremes of price scale
=> Yet, competition can easily undercut it (by lower price short- term)

ex: only 99 cts

Question 16

consumers positioning approach

Answer 16

=> Might be perceived as exclusionary (if consumer different)
=> Good if community is desirable

ex : iPod and young’s

Question 17

product class positioning approach

Answer 17

=> Good if goal is to become standard of product class
=> Exclusionary (e.g., if consumers don’t want sport car for S5)

ex : Audi = Sport car

Question 18

cultural symbol positioning approach

Answer 18

=> Can be big asset if culture fits and is strongly positive
=> Restricts customers significantly, very exclusionary

ex : Toblerone, Cervin

Question 19

describe some common IMC objectives

Answer 19

=> Develop Brand awareness
=> Increase category demand
=> Reinforce purchase decision
=> Change costumer beliefs & attitudes 
=> Enhance purchase action
=> Encourage repeated purchases 
=> Build customer traffic
=> Enhance firm image
=> Increase market share

Question 20

6 factors that can influence the effect of marketing communications effort on sales

Answer 20

1. linear effect
2. Diminishing return
3. Marginal analysis curve
4. decay effect

=> When brand stops communication, consumers start forgetting the brand

5. wear-out effect

=> Communication can become old

6. random effect

=> Snow storm, outcome of soccer game, etc.

Question 21

Determinants of the communication budget, which should align to the marketing communication objectives

Answer 21

=> crisis situation

=> planning gap

=> organizational characteristics

=> Economics of sales

=> Contingencies

=> Market share objectives

=> Market potential

=> Market Size

=> Economic recession

=> Unexpected opportunities and threats

Question 22

6 methods for determining IMC budgets

Answer 22

1. Objective and Task (=THE BEST)
2. Percentage of Sales
3. Meet the competition
4. What we can afford
5. Pay-out planning
6. Quantitative model

Question 23

Objective and Task method for determining IMC budgets

Answer 23

Def.=sum of amounts required to satisfy each objective

=> Best method of setting IMC budgets
=> Used by more than 50% of firms

Question 24

Percentage of Sales method for determining IMC budgets

Answer 24

Def.=% of current or projected sales

=> Simple
=> Often leads IMC budget to decrease when it should be increased and vice versa
=> Does not allow for special needs (ex: brand extension)

Question 25

Meet the competition method for determining IMC budgets

Answer 25

Def.=the same amount as competitor

=> Seeks to avoid loss of market share
=> Typically used in highly competitive markets
=> May not be efficient (focus not on how well $ is spent)

Question 26

What we can afford method for determining IMC budgets

Answer 26

Def.=whatever is left over after all other budgeted items

=> Indicates management doesn’t appreciate communications
=> Communications not perceived to be revenue generating

Question 27

Pay-out planning method for determining IMC budgets

Answer 27

Def. = result of dynamic ratio applied to sales or market share

=> Allocates larger budgets during product launches
=> Allocates smaller budgets once products are established
=> Based on threshold effect
=> Goal is often: build brand awareness

Question 28

Quantitative model method for determining IMC budgets

Answer 28

Def. = output of mathematical model based on historical data

=> Simulations of effect of ad- spending on sales / profits
=> Account for individual characteristics of industry / firm